Proposal may stop spread of gaming parlors in Springfield

Two Springfield aldermen are proposing an ordinance that could stop the expansion of storefront gambling parlors that have been popping up across the city since video gaming went live in fall 2012.

The proposal from Ward 6 Ald. Cory Jobe and Ward 1 Ald. Frank Edwards would require businesses that receive city liquor licenses on or after May 15 and also operate video gaming terminals to earn at least 60 percent of their revenue from the sale of food and beverages. If they didn’t meet that requirement, they wouldn’t be able to renew their liquor licenses. Existing gaming establishments would not be subject to the new rule.

“I’m looking at this on behalf of the bar owner and the restaurant owner who lives, works and has a payroll in the capital city,” Jobe said.

A 2009 state law allows businesses that are licensed to serve alcohol to obtain a permit to have up to five video gaming terminals. Businesses in Springfield also are required to get permits from the city.

The city has issued permits to 88 establishments, which together have 379 terminals, according to the most recent figures from city clerk’s office. Eight other businesses have received their state licenses but have not obtained their city permits.

About two dozen other establishments with Springfield mailing addresses had applications pending with the Illinois Gaming Board as of March 27, according to the most recent update on the board’s website. Among those are three Dotty’s Cafes, a national chain that focuses on video gambling.

‘A real struggle’

In addition to generating revenue for the state and local governments, legalized video gaming was seen as a way to boost income for bars and restaurants that lost money due to city and state smoking bans, Jobe said. But since the machines went live, traditional businesses have seen increased competition from gaming parlors that are typically in strip malls and serve minimal food and beverages, he said.

Edwards said that, while he typically opposes placing too many regulations on businesses, “I don’t really think this was the intent of the (state) law.”

“I am concerned about our bars and restaurants,” he said. “They’ve had a real struggle here.”

Chris Hanken, co-owner of Lake Pointe Grill, Mowie’s Cue and Sebastian’s Hideout, heads an informal group of local bar owners. He said he and other bar and restaurant owners support the proposal to curb the expansion of gambling parlors.

Like Edwards, Hanken said he usually believes in letting the market determine whether a business thrives or fails.

“I’ve always been a proponent of ‘let the strongest business win,’ ” he said.

But the storefront gaming businesses are exploiting a loophole in the state law that allows them to set up shop without the overhead required to get a new restaurant or bar up and running, Hanken said.

“They don’t really have to stick their necks out,” he said. “They don’t really have to invest in the community.”

Anti-business?

Chris Stone owns Lucy’s Place, a Springfield-based chain of storefront “gaming cafes” with six locations in the capital city.

He said he’ll have to study the proposal to see how it would affect his business and its future plans.

If the city council approves the ordinance, Lucy’s Place most likely would not be able to open up any more stores in Springfield, Stone said.

Lucy’s Place has been approached about four possible new locations in the city but wanted to take a step back to do market analysis to make sure future expansion here or elsewhere doesn’t dilute its existing business, he said.

Ward 5 Ald. Sam Cahnman, whose downtown ward has the most businesses with video gaming licenses, said he opposes the proposed restriction because “it is anti-business, protectionism and anti-competitive.”

“Taxpayers and consumers are generally served best by the free market and fair competition in the marketplace,” Cahnman wrote in an email. “This proposed ordinance goes against those principles.”

The city should be encouraging people to create new businesses rather than discouraging it, he said.

Information

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